The boards of directors of both companies have unanimously approved the agreement.
In 2003, Gartner generated $858 million in revenue from 76 locations around the world, while META Group generated $122 million in revenue from 52 locations.
The acquisition of META Group is expected to add valuable dimensions to Gartner's core research capabilities.
Moreover, the addition of a sales team from META Group that is already highly conversant in Gartner's product and service offerings will enhance Gartner's ability to grow sales.
The combination will also drive operational efficiency given the complementary nature of the two companies.
"Gartner and META Group are both based in Stamford and share complementary business models, which will allow easy integration of META Group's offerings into Gartner's existing service portfolio, "Gene Hall, chief executive officer, Gartner said.
This transaction is an exciting opportunity that will give us increased depth in key sectors, geographies and markets, and an ability to seize revenue opportunities with the addition of META's well-trained and successful sales force, he added.
"Both META Group and Gartner clients will have access to greater expertise to help them meet their business goals as efficiently and effectively as possible. We look forward to working with Gene and the rest of the team at Gartner to ensure successful integration of the META Group business," Gayl Doster, co-chairman of the special committee of the board of directors of META Group, said.
Gartner intends to finance the acquisition through current cash, as well as borrowings under the company's existing line of credit.
The company does not expect the transaction to have a material impact on its 2005 operating results, excluding charges related to the integration of META Group, but expects it to be meaningfully accretive thereafter.
The company will provide additional information on the financial impact of the transaction, as well as 2005 guidance for Gartner on its 2004 year-end earnings call scheduled for February 3, 2005.
The transaction is subject to customary closing conditions, including regulatory approvals, and approval by META Group's stockholders. The transaction is expected to close in the second quarter of 2005.
Perseus Group, the San Francisco-based investment bank, provided financial advice to the Gartner group while Wachovia Capital Markets, acted as exclusive financial advisor to the META Group.
